Question 1

Which of the following is a true statement?

Accepted Answer

A)  Leaving all property to the surviving spouse maximizes the marital deduction and therefore minimizes total transfer taxes on the estates of both spouses. 
B)  A bypass provision in the will of the deceased spouse is designed to use the applicable credit of the deceased spouse by transferring property to beneficiaries other than the surviving spouse. 
C)  Serial gifts are limited in scope because only $10,000 can be transferred each year tax-free to any specific donee. 
D)  Serial gifts can move significant amounts of wealth only if employed by multiple donors. 
E)  None of the choices are true.
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
109) Andrea transferred $500,000 of stock to a trust, with income to be paid to her niece for 20 years (value $125,000) and the remainder tobe paid to her nephew (value $375,000). Andrea named a bank as independent trustee but retained the power to determine how much income, if any, will be paid in any particular year. What is the amount of the taxable gift, if any? Explain your answer. 
A)  Leaving all property to the surviving spouse maximizes the marital deduction and therefore minimizes total transfer taxes on the estates of both spouses. 
B)  A bypass provision in the will of the deceased spouse is designed to use the applicable credit of the deceased spouse by transferring property to beneficiaries other than the surviving spouse. 
C)  Serial gifts are limited in scope because only $10,000 can be transferred each year tax-free to any specific donee. 
D)  Serial gifts can move significant amounts of wealth only if employed by multiple donors. 
E)  None of the choices are true.
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
109) Andrea transferred $500,000 of stock to a trust, with income to be paid to her niece for 20 years (value $125,000) and the remainder tobe paid to her nephew (value $375,000). Andrea named a bank as independent trustee but retained the power to determine how much income, if any, will be paid in any particular year. What is the amount of the taxable gift, if any? Explain your answer.

Question 2

The gift tax is imposed on inter vivos (lifetime) transfers.

Accepted Answer

A) True 
 B)False

Question 3

Harold and Mary are married and live in a community-property state. During the marriage Harold bought a parcel of real estate for $100,000 in community funds and titled the property in his name alone. Mary died on January 30 th of this year and was survived by Harold, who did not remarry. The parcel of real property was worth $250,000 on January 30 th of this year but was only worth $220,000 at year-end. What amount, if any, is included in Mary's gross estate?

Accepted Answer

A)  $250,000. 
B)  $220,000. 
C)  $125,000. 
D)  $110,000. 
E)  zero-Mary had no ownership interest in the property at her death. 
A)  $250,000. 
B)  $220,000. 
C)  $125,000. 
D)  $110,000. 
E)  zero-Mary had no ownership interest in the property at her death.

Question 4

Ava transferred $1.5 million of real estate into an irrevocable trust for her son, Luis. The trustee was directed to retain income until Luis' 21 st birthday and then pay him the corpus of the trust. Ava retained the power to require the trustee to pay income to Luis at any time, andretained the right to the assets if Luis predeceased her. What amount of the trust, if any, will be included in Ava's estate if she died shortly after making the transfer?

Accepted Answer

$1.5 million. The value of the trust ass

Question 5

At her death Serena owned real estate worth $210,000 with her spouse in joint tenancy with the right of survivorship. Serena contributed $50,000 to the original cost of the property and her spouse contributed the remaining $100,000. What amount, if any, is included in Serena's gross estate?

Accepted Answer

A)  $50,000. 
B)  $105,000. 
C)  $80,000. 
D)  $0. This property qualifies for the marital deduction. 
E)  None of the choices are correct. 
A)  $50,000. 
B)  $105,000. 
C)  $80,000. 
D)  $0. This property qualifies for the marital deduction. 
E)  None of the choices are correct.

Question 6

The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes?

Accepted Answer

A)  An applicable credit and a marital deduction. 
B)  A charitable deduction and an annual exclusion. 
C)  A gift-splitting election and a deduction for income taxes paid by the fiduciary. 
D)  A charitable deduction and the unused spousal exemption equivalent. 
E)  All of these choices are characteristics common to both the gift and the estate tax. 
A)  An applicable credit and a marital deduction. 
B)  A charitable deduction and an annual exclusion. 
C)  A gift-splitting election and a deduction for income taxes paid by the fiduciary. 
D)  A charitable deduction and the unused spousal exemption equivalent. 
E)  All of these choices are characteristics common to both the gift and the estate tax.

Question 7

The tax rate schedule on taxable transfers has a maximum tax rate of 40percent.

Accepted Answer

A) True 
 B)False

Question 8

Ashley owns a whole-life insurance policy worth $25,000 that directs the insurance company to pay the beneficiary $500,000 on her death. Ashley pays the annual policy premiums and has the power to designate the beneficiary of the policy. What value of the policy, if any, would be included in Ashley's estate upon her death?

Accepted Answer

$500,000.Because Ashley owned

Question 9

This year, Brent by himself purchased season baseball tickets in the exclusive sky club. The price of the tickets was $60,000, and Brent divided the tickets equally with his two brothers (Brent gave one-third of the tickets to each brother). Has Brent made a taxable gift and, if so, in what amount?

Accepted Answer

A)  Brent made a taxable gift of $45,000. 
B)  Brent made two taxable gifts of $17,000 each. 
C)  Brent transferred the tickets for love and affection so no gift tax is imposed. 
D)  Brent made two taxable gifts of $5,000. 
E)  None of the choices are correct. 
A)  Brent made a taxable gift of $45,000. 
B)  Brent made two taxable gifts of $17,000 each. 
C)  Brent transferred the tickets for love and affection so no gift tax is imposed. 
D)  Brent made two taxable gifts of $5,000. 
E)  None of the choices are correct.

Question 10

A future interest is a right to receive income or property in the future.

Accepted Answer

A) True 
 B)False

Question 11

In order for a transfer to be treated as a complete gift, the transfer must be irrevocably relinquished by the donor.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is (are) true for both gratuitous and testamentary transfers?

Accepted Answer

A)  An applicable credit of up to $15,000 per donee per year reduces the tax on any transfer. 
B)  An annual exclusion offsets any transfer up to $15,000. 
C)  An election can be made to split a transfer between spouses. 
D)  A charitable and a marital deduction are allowed in computing the taxable transfer. 
E)  All of the choices are true. 
A)  An applicable credit of up to $15,000 per donee per year reduces the tax on any transfer. 
B)  An annual exclusion offsets any transfer up to $15,000. 
C)  An election can be made to split a transfer between spouses. 
D)  A charitable and a marital deduction are allowed in computing the taxable transfer. 
E)  All of the choices are true.

Question 13

Which of the following is a true statement?

Accepted Answer

A)  A remainder interest held by the decedent at the time of death is not included in the decedent's gross estate. 
B)  The value of a remainder interest depends in part on the Section 7520 interest rate at the time of death. 
C)  The value of a remainder interest in a life estate is independent of the age of the life tenant. 
D)  The value of a life estate does not depend upon the age of the life tenant. 
E)  None of the choices are true. 
A)  A remainder interest held by the decedent at the time of death is not included in the decedent's gross estate. 
B)  The value of a remainder interest depends in part on the Section 7520 interest rate at the time of death. 
C)  The value of a remainder interest in a life estate is independent of the age of the life tenant. 
D)  The value of a life estate does not depend upon the age of the life tenant. 
E)  None of the choices are true.

Question 14

The federal transfer taxes are calculated using cumulative lifetime transfers.

Accepted Answer

A) True 
 B)False

Question 15

A serial gift strategy consists of arranging a trust to maximize the value of the applicable credit.

Accepted Answer

A) True 
 B)False

Question 16

Ricardo transferred $1,000,000 of cash to State University for a new sports complex. Calculate the amount of the taxable gift.

Accepted Answer

and a $985,000 charitable gift tax deduc

Question 17

At his death Stanley owned real estate worth $393,240 with two other individuals as equal tenants in common. Stanley contributed $58,000 to the $116,000 total cost of the property. What amount, if any, is included in Stanley's gross estate?

Accepted Answer

A)  $58,000. 
B)  $196,620. 
C)  $393,240. 
D)  $131,080. 
E)  None of the choices are correct. 
A)  $58,000. 
B)  $196,620. 
C)  $393,240. 
D)  $131,080. 
E)  None of the choices are correct.

Question 18

Joshua and David purchased real property for $500,000 as equal tenants in common. Although they are listed as equal co-owners, Joshua was only able to provide $200,000 of the purchase price. David treated the additional $100,000 of his contribution to the purchase price as a gift to Joshua. If the property is worth $2.5 million at Joshua's death, what amount would be included in Joshua's estate?

Accepted Answer

$1.25 million. If the title to

Question 19

This year Don and his son purchased real estate for an investment. The price of the property was $500,000, and the title named Don and his son as joint tenants with the right of survivorship. Don provided $320,000 of the purchase price and his son provided the remaining $180,000. Has Don made a taxable gift and, if so, in what amount?

Accepted Answer

A)  Don has made a taxable gift of $205,000. 
B)  Don has made a taxable gift of $70,000. 
C)  Don has made a taxable gift of $22,000. 
D)  Don has made a taxable gift of $55,000. 
E)  None of the choices are correct-Don did not make a taxable gift. 
A)  Don has made a taxable gift of $205,000. 
B)  Don has made a taxable gift of $70,000. 
C)  Don has made a taxable gift of $22,000. 
D)  Don has made a taxable gift of $55,000. 
E)  None of the choices are correct-Don did not make a taxable gift.

Question 20

The generation-skipping tax is designed to accomplish which of the following?

Accepted Answer

A)  Generate additional revenues to supplement the estate tax. 
B)  Prevent the avoidance of transfer taxes (both estate and gift tax) through transfers that skip a generation of recipients. 
C)  Eliminate the possibility that the estate tax can be avoided by gifts in contemplation of death. 
D)  Replace the gift tax on distributions from trusts. 
E)  None of the choices are correct. 
A)  Generate additional revenues to supplement the estate tax. 
B)  Prevent the avoidance of transfer taxes (both estate and gift tax) through transfers that skip a generation of recipients. 
C)  Eliminate the possibility that the estate tax can be avoided by gifts in contemplation of death. 
D)  Replace the gift tax on distributions from trusts. 
E)  None of the choices are correct.

Which of the following is a true statement?

The gift tax is imposed on inter vivos (lifetime) transfers.

At her death Serena owned real estate worth $210,000 with her spouse in joint tenancy with the right of survivorship. Serena contributed $50,000 to the original cost of the property and her spouse contributed the remaining $100,000. What amount, if any, is included in Serena's gross estate?

The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes?

The tax rate schedule on taxable transfers has a maximum tax rate of 40percent.

This year, Brent by himself purchased season baseball tickets in the exclusive sky club. The price of the tickets was $60,000, and Brent divided the tickets equally with his two brothers (Brent gave one-third of the tickets to each brother). Has Brent made a taxable gift and, if so, in what amount?

A future interest is a right to receive income or property in the future.

In order for a transfer to be treated as a complete gift, the transfer must be irrevocably relinquished by the donor.

Which of the following statements is (are) true for both gratuitous and testamentary transfers?

Which of the following is a true statement?

The federal transfer taxes are calculated using cumulative lifetime transfers.

A serial gift strategy consists of arranging a trust to maximize the value of the applicable credit.

Ricardo transferred $1,000,000 of cash to State University for a new sports complex. Calculate the amount of the taxable gift.

At his death Stanley owned real estate worth $393,240 with two other individuals as equal tenants in common. Stanley contributed $58,000 to the $116,000 total cost of the property. What amount, if any, is included in Stanley's gross estate?

The generation-skipping tax is designed to accomplish which of the following?

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Business Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Non-Liquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Filters

Exam 14: Transfer Taxes and Wealth Planning

Which of the following is a true statement?

The gift tax is imposed on inter vivos (lifetime) transfers.

At her death Serena owned real estate worth $210,000 with her spouse in joint tenancy with the right of survivorship. Serena contributed $50,000 to the original cost of the property and her spouse contributed the remaining $100,000. What amount, if any, is included in Serena's gross estate?

The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes?

The tax rate schedule on taxable transfers has a maximum tax rate of 40percent.

This year, Brent by himself purchased season baseball tickets in the exclusive sky club. The price of the tickets was $60,000, and Brent divided the tickets equally with his two brothers (Brent gave one-third of the tickets to each brother). Has Brent made a taxable gift and, if so, in what amount?

A future interest is a right to receive income or property in the future.

In order for a transfer to be treated as a complete gift, the transfer must be irrevocably relinquished by the donor.

Which of the following statements is (are) true for both gratuitous and testamentary transfers?

Which of the following is a true statement?

The federal transfer taxes are calculated using cumulative lifetime transfers.

A serial gift strategy consists of arranging a trust to maximize the value of the applicable credit.

Ricardo transferred $1,000,000 of cash to State University for a new sports complex. Calculate the amount of the taxable gift.

At his death Stanley owned real estate worth $393,240 with two other individuals as equal tenants in common. Stanley contributed $58,000 to the $116,000 total cost of the property. What amount, if any, is included in Stanley's gross estate?

The generation-skipping tax is designed to accomplish which of the following?

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Business Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Non-Liquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Filters